Saudi construction firms’ confidence at highest level so far this year

That’s according to a new survey of construction buyers in the Kingdom, which has been running since January 2026.

The Alrajhi Capital Saudi Construction Index surveys 200 construction companies and aims to reflect the structure of the sector in Saudi Arabia.

The latest survey, conducted in July, registered an activity index score of 55.2 (where 50.0 indicates no change). That was down slightly from 56.3 in June but the second-highest reading since January, after the market faltered earlier this year following the onset of war in Iran.

Respondents linked the higher levels of activity to a rebound in new order books and the reactivation of delayed projects.

All three segments (residential, non-residential, and infrastructure) recorded another expansion in activity in July, with the period of growth now extending to three months.

Infrastructure work was the fastest-growing area of activity (56.9) with anecdotal evidence suggesting that government-backed infrastructure developments had driven growth, particularly in transportation and utilities.

Residential building also grew strongly in July (56.0) amid an improvement in market conditions.

Non-residential structures (office/commercial, institutional, industrial) lost some momentum but still scored 53.4.

New work rose at its steepest rate in July for five months, with residential orders running at a strong pace. Survey respondents commented on improving market conditions, a recovery in investment sentiment, and new tender opportunities related to public infrastructure projects.

Around 48% of the survey panel predicted a rise in business activity for the year ahead, while only 4% predicted a decline.

Sultan Altowaim, head of research at Alrajhi Capital said, “The Alrajhi Capital Saudi Construction Index signalled another strong month for the Saudi construction sector in July, with business activity expanding for a third consecutive month. The improvement was supported by stronger new order growth, reflecting continued demand across the sector and the reactivation of previously delayed projects. While input costs continued to rise, cost pressures eased during the month.

“Looking ahead, business confidence strengthened to its highest level since the survey began, supported by easing geopolitical tensions, a recovery in new contracts and increasing public-private partnership opportunities. These factors continue to provide a positive backdrop for Saudi Arabia’s construction sector.”